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The proposed increase to 14.99% will take LGC’s interest in Little Green Pharma to just below the 15% threshold requiring approval from the Australian Foreign Investment Review Board.

Increasing LGC’s interest in Little Green Pharma has been a top priority for LGC over the past few months, and even more so since the Australian Government announced on January 4, 2018 an important step for the development of the Australian medical cannabis sector by permitting the export of medicinal cannabis products from Australia.

“Australian Government to allow medicinal cannabis exports (4 January 2018)

In an important step for the development of the medicinal cannabis sector and to secure long-term supplies for Australian patients, the Federal Government will permit the export of medicinal cannabis products.

This follows extensive consultation that was undertaken last year.

Our top priority is to ensure a safe quality supply of medicinal cannabis for Australian patients.

This decision will help both the domestic supply and Australian producers by strengthening the opportunities for domestic manufacturers.

The Turnbull Government is committed to ensuring a safe, quality supply of medicinal cannabis is available to Australian patients under proper medical supervision.

In an additional move to support both patients and manufacturers, the Turnbull Government will now permit the export of Australian manufactured medicinal cannabis products.

We are making these changes because the expanding domestic medicinal cannabis products industry is facing increasing competition from imports.

And allowing the export of medicinal cannabis products will help the developing domestic market to grow further.

We believe it is appropriate to amend the regulations governing the export of cannabis products to provide a level playing field.

But this change will not come at the expense of Australian patients.

In fact, by helping the domestic manufacturers to expand, this in turn helps to ensure an ongoing supply of medicinal cannabis products here in Australia.

It will be a condition of any licence authorising export that medicinal cannabis products be made available, when and if required, to Australian patients first.

Exports were not initially allowed in the scheme because Australia was focussed on gaining the confidence of the international community in its cultivation system and other controls.

I’m pleased that the International Narcotics Control Board reported favourably on Australia’s framework in its 2016 Annual Report.

We are continuing to make it easier for doctors to access medicinal cannabis products more rapidly, while maintaining strict safeguards for individual and community safety.

We want a robust Australian medicinal cannabis industry so that doctors have safe, quality domestic products that they can confidently prescribe to their patients.

Doctors can apply under the Therapeutic Goods Administration’s Special Access Scheme Category or via an Authorised Prescriber to legally prescribe medicinal cannabis products.”

John McMullen, CEO of LGC commented, “The recent changes in Australian Government policy to allow companies like Little Green Pharma to export medical cannabis outside of Australiasignificantly changes the importance of this investment within the LGC global footprint portfolio. We have worked diligently through the highly-regulated Australian environment for the cannabis sector and have gained approval from the Australian Government’s Office of Drug Control to allow LGC to increase our shareholding above 5%. We are also looking forward to Little Green Pharma producing its first medical cannabis products for commercial sale over the next few months. We are also working closely with Little Green Pharma to provide access to other investee companies within LGC’s portfolio to cross-pollinate growing, facilities, processing and marketing ideas to broaden Little Green Pharma’s reach into potential international markets.”

Fleta Solomon, Little Green Pharma’s Managing Director commented; “We are thrilled that LGC has decided to increase its investment in Little Green Pharma to 14.99% and strengthen its position as a key cornerstone investor. With the Federal Health Minister recently announcing Australia’s potential to be the world’s number one medicinal cannabis supplier, LGC can strategically assist Little Green Pharma in its export and growth opportunities.”

The new Binding Term Sheet will increase LGC’s strategic shareholding in Little Green Pharma to an aggregate of 9,783,495 shares, representing a 14.99% interest. To that end, Little Green Pharma will issue 2,283,495 additional shares to LGC at a deemed issue price of AUD $1.16398 per share for a total consideration of approximately AUD $2,657,950. LGC will pay for the shares by issuing 5,000,000 LGC shares to Little Green Pharma at a deemed issue price of CAD $0.53 per share, representing the closing price of LGC’s shares on the TSX Venture Exchange on Friday, January 19, 2018, for a total consideration of CAD $2,650,000, equivalent to AUD $2,657,950 based on the Bank of Canada exchange rate on January 19, 2018.

The Binding Term Sheet also contains an undertaking by LGC to participate in Little Green Pharma’s next capital raise, by June 30, 2018, to the extent required to maintain LGC’s 14.99% shareholding in Little Green Pharma.

Closing of the transaction with Little Green Pharma is subject to the parties entering into a definitive subscription agreement and to standard closing conditions. The transaction is also subject to regulatory approval, including that of the TSX Venture Exchange.

Note: On January 19, 2017, the Bank of Canada’s daily average exchange rate for the Australian dollar was AUD $1.00 = CAD $0.9970.

Little Green Pharma is a private entity in Australia and is one of the few companies in Australia to be granted a licence to cultivate and produce Medical Cannabis within Australia. On December 14, 2017, Little Green Pharma announced that its first crop of medicinal cannabis was being cultivated in Western Australia at its secure growing facility south of Perth. That event marks the first time medicinal cannabis has been cultivated locally in Western Australia. Little Green Pharma aims to have first product available for patients within the first few months of 2018.

LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSXV: LG). LGC’s objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services.

Information Relating to Little Green Pharma

All information contained in this press release relating to Little Green Pharma has been provided to LGC by Little Green Pharma. LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.

FORWARD-LOOKING STATEMENTSThis press release may contain forward-looking statements with respect to LGC Capital Ltd. (“LGC”) and Habi Pharma Pty Ltd (“Habi Pharma”), and their respective operations, strategy, investments, financial performance and condition. These statements generally can be identified by use of forward- looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. The actual results and performance of LGC and Habi Phama could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the factors described under “Risk Factors and Risk Management” in LGC’s Management’s Discussion and Analysis for the fiscal year ended September 30, 2016, as filed on SEDAR (www.sedar.com). The cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and neither LGC nor Habi Pharma has any obligation to update such statements, except to the extent required by applicable securities laws.

Caution Regarding Press ReleasesNeither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE LGC Capital Ltd

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